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U.S. Politics U.S. intelligence warns China is single largest espionage threat as Canada mulls Huawei ban

FBI Director Christopher Wray, CIA Director Gina Haspel and National Intelligence Director Dan Coats arrive to a hearing with the Senate Intelligence Committee on Capitol Hill, on Jan. 29, 2019.

SARAH SILBIGER/The New York Times News Service

United States intelligence officials and politicians are escalating their fight against Chinese espionage in the wake of two wide-ranging indictments of Huawei Technologies Co. and they’re calling for American allies to join the battle.

But the federal government is signalling it will not accelerate a decision over whether to ban Huawei from providing equipment for 5G cellular networks in Canada. Ottawa’s deliberations come as a Canadian court examines a request from U.S. prosecutors to extradite the Chinese telecommunications company’s chief financial officer, Meng Wanzhou.

Canadian Innovation Minister Navdeep Bains said Canada will not be rushed into deciding about Huawei’s role in 5G, a massive upgrade to the infrastructure that powers the internet and mobile phone networks.

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“This is not about rushing a decision because of political pressure. This is about making sure we do what’s in the best interests of Canadians,” he said on Tuesday after a closed-door cabinet meeting to discuss China.

The United States, Australia and New Zealand, all key Canadian allies, have already announced restrictions on the use of Huawei equipment.

Meanwhile, Ms. Meng appeared briefly in a Vancouver court Tuesday to make a minor change to her bail conditions. American authorities on Monday filed a formal request for her extradition from Canada. The process, which could ultimately take years, will begin with a hearing on March 6.

At a Capitol Hill meeting of the U.S. Senate intelligence committee Tuesday, the chiefs of the U.S.’s spy agencies warned that China represents the single largest espionage threat to the country.

Dan Coats, the director of National Intelligence, said industries from automaking to software creation to military research and development have all been targeted by Chinese efforts to pilfer trade secrets.

He said China’s global cybercapabilities are strong enough that the country could shut down pieces of American infrastructure, such as an oil and gas pipeline, or disable U.S. websites containing critical news stories about the regime in Beijing.

“While we were sleeping in the last decade and a half, China had a remarkable rise … a significant amount of that was achieved by stealing information from our companies,” he said.

Mr. Coats called on other democratic countries to wake up to the threat as well.

“We have alerted our allies. They are now second-guessing and questioning their initial response to China: ‘Oh it’s a great market, we need to get over there – don’t worry about anything else except selling our product,’ ” he said. “They’re now finding that their product has been duplicated by the Chinese and sold for half the price because they didn’t have to spend as much money on research and development.”

The contrasting messages from Canada and the United States came the day after U.S. prosecutors unveiled a slew of charges against Huawei. In one case, they accused Ms. Meng of taking part in a decade-long scheme to dodge U.S. sanctions on Iran. In another, they accused Huawei of stealing technical details on “Tappy,” a proprietary phone-testing robot created by T-Mobile, and creating a program that paid bonuses to Huawei employees who pilfered other companies’ trade secrets.

Canadian police arrested Ms. Meng at the U.S.’s request in December. In apparent retaliation, Chinese authorities arrested two Canadian men, former diplomat Michael Kovrig and entrepreneur Michael Spavor, without charge, and abruptly upgraded the sentence of a convicted Canadian drug trafficker, Robert Schellenberg, from prison to death.

FBI director Christopher Wray offered the Senate committee a simple metric to demonstrate how seriously his agency is taking China: Nearly every one of the FBI’s 56 field offices is currently running an investigation into economic espionage and nearly all of those investigations involve China.

“I think China writ large is the most significant counterintelligence threat we face,” he said.

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Committee members Marco Rubio and Mark Warner have tabled a bill that would create a new office of critical technologies and security, based in the White House, to steer a government-wide strategy to protect U.S. technology from foreign theft and espionage. Another bill in the House of Representatives, sponsored by Mike Conaway and Tim Ryan, would bar the sale of some U.S. intellectual property and technology to China.

Mr. Rubio and Mr. Warner last year wrote a letter to Mr. Trudeau urging Canada to bar Huawei from its 5G network.

Mr. Warner, himself a former technology executive, said at the hearing that he once subscribed to the idea that helping China open its economy would lead the country to become more liberal politically.

“What we have seen is the opposite: a consolidation of the power of the Chinese Communist Party under Xi Jinping, a rise in nationalist tendencies, an aggressive posture toward those nations on China’s periphery,” he said. “Especially concerning have been the efforts of big Chinese tech companies … to acquire sensitive technology.”

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